Correlation Between Bank Mega and MNC Vision
Can any of the company-specific risk be diversified away by investing in both Bank Mega and MNC Vision at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bank Mega and MNC Vision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Mega Tbk and MNC Vision Networks, you can compare the effects of market volatilities on Bank Mega and MNC Vision and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bank Mega with a short position of MNC Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Mega and MNC Vision.
Diversification Opportunities for Bank Mega and MNC Vision
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and MNC is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bank Mega Tbk and MNC Vision Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MNC Vision Networks and Bank Mega is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bank Mega Tbk are associated (or correlated) with MNC Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MNC Vision Networks has no effect on the direction of Bank Mega i.e., Bank Mega and MNC Vision go up and down completely randomly.
Pair Corralation between Bank Mega and MNC Vision
Assuming the 90 days trading horizon Bank Mega Tbk is expected to under-perform the MNC Vision. But the stock apears to be less risky and, when comparing its historical volatility, Bank Mega Tbk is 1.62 times less risky than MNC Vision. The stock trades about -0.25 of its potential returns per unit of risk. The MNC Vision Networks is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,400 in MNC Vision Networks on December 1, 2024 and sell it today you would lose (200.00) from holding MNC Vision Networks or give up 8.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Bank Mega Tbk vs. MNC Vision Networks
Performance |
Timeline |
Bank Mega Tbk |
MNC Vision Networks |
Bank Mega and MNC Vision Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Mega and MNC Vision
The main advantage of trading using opposite Bank Mega and MNC Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Mega position performs unexpectedly, MNC Vision can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in MNC Vision will offset losses from the drop in MNC Vision's long position.Bank Mega vs. Bank Ocbc Nisp | Bank Mega vs. Bank Mayapada Internasional | Bank Mega vs. Bank Permata Tbk | Bank Mega vs. Bank Pan Indonesia |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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